Every time gold nears $1000, it gets “smacked down”. I wonder why….Put that into the context of how much easier it was to make progress BEFORE the first assault on the magic number of $1000:
Bernanke and the banksters will once again do everything they can to “smack down” gold if it does rise above $1000. You know that the gov’t leases gold to the “bullion banks” who then short it. (When gold rises, it creates doubts in the value of paper money). If they’re unable to constrain gold’s rise this time, it will mean “the jig is up”.
Longer term, THIS could also be an important factor in breaking the FED’s hold on gold:
China pushes silver and gold investment to the masses
A report suggests that the Chinese government is pushing the general public into buying gold and silver bullion, which could have a dramatic effect on the markets.
Author: Lawrence WilliamsPosted: Thursday , 03 Sep 2009
Author: Lawrence WilliamsPosted: Thursday , 03 Sep 2009
LONDON -
We are indebted again to Paul Mylchreest's Thunder Road Report for news that will bring big smiles to gold and silver investors everywhere. Apparently China is pushing the idea of buying gold and silver for investment purposes to the general population in the way that Western television sells soap powder. If 1.3 billion Chinese citizens start buying gold and silver, even in tiny quantities, imagine what that will do to the market!
The report notes that China's Central Television, the main state-owned television company, has run a news programme letting the public know how easy it is to buy precious metals as an investment. On silver investment the announcer is quoted as saying " China has introduced its first ever investment opportunity for silver bullion. The bars are available in 500g, 1kg, 2kg and 5kg with a purity of 99.9%. Figures show that gold was fifty times more expensive than silver in 2007, but now that figure has reached over seventy times. Analysts say that silver has been undervalued in recent years. They add that the metal is the right investment for individual investors and could be a good way to cash in."
What appears to have happened in China is a total relaxation of strictures on holding precious metals by the individual with the government pushing gold and silver as an investment option, seemingly at every opportunity. This is a far cry from the situation only a few years ago where the distribution of gold and silver was strictly controlled. Now, the Thunder Road Report notes that every bank will sell gold and silver bullion bars in four different sizes to individuals and gold related investments are said to be soaring in popularity.
Around a year ago, Leyshon Resources managing director, Paul Atherley, in an investor presentation in London - and no doubt delivered elsewhere in the world too - commented that some employees at the company's gold mining project in northern China would, on pay day, go to the local bank and buy a small gold bar as an investment and wealth protector. To an extent we put this down at the time to mining company hype - but this seems to be exactly the same phenomenon noted by Thunder Road. The Chinese are being converted from being the lowest per capita gold consumers in the world to a nation of small precious metals investors. Now, by next year, Chinese consumption of gold is likely to exceed that of India, which has been for years the world's biggest gold market. And one suspects that the potential for gold purchasing by individuals is only in its earliest stages. As more and more Chinese move into the cities and individual wealth grows, this trend is only likely to accelerate.
Paul ends the piece on Chinese gold and silver potential with the following comment: "Simply put, the Chinese government is trying to trigger a national gold craze...and it's working. The Chinese public now has gold trading platforms on steroids.... ...Also, for the first time in history, Chinese investors can even trade gold abroad (in London) with the swipe of a ‘Lucky Gold' card. I can't even get Bank of America to open a foreign currency account."
This may be an overstatement of the case from a precious metals bull - or it may not! Certainly if China is indeed pushing the public to buy gold then there may well be a hidden agenda here. It's unlikely they are doing it and will suddenly pull the rug out from under millions of investors. A cynic (or a raging gold bull) would suggest that this will precede a move to switch a good proportion of the country's reserves into gold which would have a huge effect on the global gold price and could prove disastrous for the dollar. Maybe it's not in China's interests to drive the dollar down too much until it has managed to divest itself of the huge dollar overhang (see the article on Chinese Sovereign Wealth Funds we published yesterday - Chinese sovereign wealth fund dumping dollars for strategic investments like gold ). The country may well already be, of course, surreptitiously building its gold reserves without reporting the build-up.
If the Chinese are indeed beginning to buy gold and silver as the quoted report suggests then this has to be a strong signal that prices are going to rise, and perhaps rise dramatically, in the relatively near future. We await comment from other China watchers for confirmation of the gold and silver buying spree, but with global gold production at best flat and probably in decline, even a small increase in Chinese buying could have a substantial impact on gold and silver prices.
(from Mineweb)
Jock G
We are indebted again to Paul Mylchreest's Thunder Road Report for news that will bring big smiles to gold and silver investors everywhere. Apparently China is pushing the idea of buying gold and silver for investment purposes to the general population in the way that Western television sells soap powder. If 1.3 billion Chinese citizens start buying gold and silver, even in tiny quantities, imagine what that will do to the market!
The report notes that China's Central Television, the main state-owned television company, has run a news programme letting the public know how easy it is to buy precious metals as an investment. On silver investment the announcer is quoted as saying " China has introduced its first ever investment opportunity for silver bullion. The bars are available in 500g, 1kg, 2kg and 5kg with a purity of 99.9%. Figures show that gold was fifty times more expensive than silver in 2007, but now that figure has reached over seventy times. Analysts say that silver has been undervalued in recent years. They add that the metal is the right investment for individual investors and could be a good way to cash in."
What appears to have happened in China is a total relaxation of strictures on holding precious metals by the individual with the government pushing gold and silver as an investment option, seemingly at every opportunity. This is a far cry from the situation only a few years ago where the distribution of gold and silver was strictly controlled. Now, the Thunder Road Report notes that every bank will sell gold and silver bullion bars in four different sizes to individuals and gold related investments are said to be soaring in popularity.
Around a year ago, Leyshon Resources managing director, Paul Atherley, in an investor presentation in London - and no doubt delivered elsewhere in the world too - commented that some employees at the company's gold mining project in northern China would, on pay day, go to the local bank and buy a small gold bar as an investment and wealth protector. To an extent we put this down at the time to mining company hype - but this seems to be exactly the same phenomenon noted by Thunder Road. The Chinese are being converted from being the lowest per capita gold consumers in the world to a nation of small precious metals investors. Now, by next year, Chinese consumption of gold is likely to exceed that of India, which has been for years the world's biggest gold market. And one suspects that the potential for gold purchasing by individuals is only in its earliest stages. As more and more Chinese move into the cities and individual wealth grows, this trend is only likely to accelerate.
Paul ends the piece on Chinese gold and silver potential with the following comment: "Simply put, the Chinese government is trying to trigger a national gold craze...and it's working. The Chinese public now has gold trading platforms on steroids.... ...Also, for the first time in history, Chinese investors can even trade gold abroad (in London) with the swipe of a ‘Lucky Gold' card. I can't even get Bank of America to open a foreign currency account."
This may be an overstatement of the case from a precious metals bull - or it may not! Certainly if China is indeed pushing the public to buy gold then there may well be a hidden agenda here. It's unlikely they are doing it and will suddenly pull the rug out from under millions of investors. A cynic (or a raging gold bull) would suggest that this will precede a move to switch a good proportion of the country's reserves into gold which would have a huge effect on the global gold price and could prove disastrous for the dollar. Maybe it's not in China's interests to drive the dollar down too much until it has managed to divest itself of the huge dollar overhang (see the article on Chinese Sovereign Wealth Funds we published yesterday - Chinese sovereign wealth fund dumping dollars for strategic investments like gold ). The country may well already be, of course, surreptitiously building its gold reserves without reporting the build-up.
If the Chinese are indeed beginning to buy gold and silver as the quoted report suggests then this has to be a strong signal that prices are going to rise, and perhaps rise dramatically, in the relatively near future. We await comment from other China watchers for confirmation of the gold and silver buying spree, but with global gold production at best flat and probably in decline, even a small increase in Chinese buying could have a substantial impact on gold and silver prices.
(from Mineweb)
Jock G
I remember last year, in June 2008, when speculation about oil drove people to proclaim that the barrel was about to reach 200 USD almost a consensus with some hypernervous guys saying that it could reach 300 USD. 400 USD was the highest price I heard from a sheik. During this time I watched the TSX going wild, reaching 15 150 an all time high and listened to managers speculating on a possible 17 000 points within the next twelve months.
ReplyDeleteThis year again, we have a new topic to be excited with: China. In the past, all roads led to Rome. Now, it seems that they lead to Beijing. There is no limit to China’s growth and it is the master key explanation of every financial phenomenon. Of course, I must admit that we can’t talk about gold or any other commodity while ignoring the track this country chose to follow.
In fact, China’s velocity is amazing. I guess that managing a dictatorship is easier and less expensive than leading a democracy. Implementing strategies and tactics go faster since a handful of people on the top decide for 1.3 billion ones. A democracy has to take into account hundreds of deputees, people’s opinions, journalists, hold 1000 meetings before making any decision and it can’t torture citizens when they don’t behave as expected. These are constraints which make a democracy very sluggish. Americans are still waiting for the 700 billion stimuli whereas China has almost spent its one. I think that what is happening in China is beyond our culture.
Although the information the post gives is very interesting, it also reminds me that all is about speculation because we just take the piece of information that the Chinese government is willing to give us. Moreover, we could questions the limits of a dictatorship. Indeed, until now, the Chinese model of development has distributed wealth like every developing country does by creating a privileged class among an overwhelming majority of poors. It has given birth to important social tensions where peace requires a very strong growth which sustainability can be called into question. Therefore, the way china is growing hasn’t proved yet to be adapted to the good shape of a consumer society stable and capable of going through crisis like the ones the western countries have been coping with for more than 200 years.
In a nutshell, China looks like a penny stock on an upside breakout at the one dollar resistance. I’m still waiting for some solidity tests before buying it.
This morning once my office screens came to life on this warm, sunny autumn day in the UK (yes, my positions are winning so far this morning) the first thing I noticed was gold trading above $1004 and breaking out again.
ReplyDeleteGold seems to be the most talked about trade at the moment, "everyone" is bullish on gold, can there really be many more traders willing to enter at these levels or is the only charge left the one waiting for the band wagon brigade to jump aboard before a crash?....your guess is as good as mine guys, can you take a look in your famous crystal ball please.
However, I find that a MACD Divergence is like a "cloudy" crystal ball, warning of a probable change in the wind direction without being definitive.
Bearing this in mind, when looking at my long term charts they suggest all may not be rosy, the monthly MACDH seems to be heading towards a bearish divergence with price, something I've not witnessed before during my brief love affair with trading so far, while on the weekly charts this is already the case, indeed there is a triple bearish divergence in the MACDH and the MACD lines are also diverging with price with a confirming divergence forming in the RSI.
finally, the huge reverse head and shoulders pattern that everyone sees on the weeklies can be a powerful bullish pattern although, it can be equally powerful when it fails to confirm, reversing dramatically as recently happened in the S&P and DOW taking the majority by suprise!
Mark L